With the price of homes in Arizona and across the country dropping at alarming rates, homes are once again becoming affordable for a wide variety of persons, except for one small detail…as the homes become more affordable, money to purchase them becomes harder to get!
Home prices haven’t been so low in the area since 1999. Only five years ago, the average price of a home in Phoenix topped out at $267,000. At that time, money was easy to come by. Lenders were everywhere and it was easy to get a loan, even if buyers couldn’t afford the payments. But the housing bubble soon burst and by 2008 the housing market started a quick downward spiral that hit an all-time low early this year when the average home price in the Phoenix area nose-dived to an staggering $115,00.00. Experts hoped this would be temporary, but the prices have not rebounded and some are wondering if they could crumble to an even lower price.
Financial gurus agree that the cause of plummeting prices is the huge foreclosure market. Luckily, the Phoenix area has seen a huge drop in the number of foreclosures on the market, down to just over 27,000 currently from an alarming 42,000 just two years ago. The good thing, if there is one, is that the foreclosures are not sitting empty.
Real estate investors are buying foreclosures and many of the houses are going back on the tax rolls as either rental properties or for re-sale. The rental market in the Phoenix area is enormous. Many former home-owners, now unable to buy, are finding they can rent a comparable home for even less than what they were once paying for house payments, plus they do not have the extra costs of insurance and upkeep. It’s a winning situation for both the renter and the investor.